It seems AT&T’s (T) acquisition of Time Warner, completed last month, may have another challenge: The U.S. Department of Justice plans to appeal the federal court judge’s approval of the $85 billion merger, according toCNBC’s Christine Wang, citing a court filing by the DoJ today.

Shares of AT&T are down 47 cents, or 1.5%, at $31.76, in late trading.

Etienne FRANCHI/AFP/Getty Images)

In an emailed statement this evening, David McAtee, AT&T's general counsel, said “the Court’s decision could hardly have been more thorough, fact-based, and well-reasoned.

"While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.

"We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”

Debating Broadcom - CA

Shares of chip giant Broadcom (AVGO) closed down $33.46, or 14%, at $209.98, after the company last night said it will spend $19 billion in cash to buy CA (CA), the software vendor best known for mainframe programming tools.

Broadcom declined our request to speak with CEO Hock Tan and CFO Tom Krause, but Krause did speak with The Wall Street Journal’s Dana Cimilluca, Dana Mattioli and Ted Greenwald. In that article, Krause says that “Software is a natural extension when you think about the ecosystem we’re playing in."

Analysts seemed mostly baffled by the move, and some expressed indignation, such as Stacy Rasgon of Bernstein, who describes himself as "absolutely speechless that the company chose not to host a broad investor conference call,” an omission he found "indefensible."

Others have come to the stock’s defense today. Piper Jaffray’s Harsh Kumar, who has an Overweight rating on the stock, thinks the Street is "completely misunderstanding” the deal.

"In our opinion, the CA product set is an extension into some of the Broadcom’s recent acquisitions (Brocade and LSI), ones that have worked well for the company.

Broadcom chief executive Hock Tan.

"It is important to note that Broadcom’s product set consists of switches, ASICs and boxes that are sold into the highly critical data center and mainframe environments that have very few alternatives.

"On the other hand, CA sells mission critical software into the same markets, also with very few alternatives. Broadcom has successfully deployed this same strategy in the past."

But some ask whether there’s now a credibility gap at the top of Broadcom. Romit Shah of Instinet, reiterating a Neutral rating, writes that “to say this came out of left field would be an understatement,” and he raises the question “Do we still trust Hock?"

Intel’s new chip

Shares of Intel (INTC) closed up $1.15, or 2.3%, at $52.35, after the company announced it will purchase eASIC, a 19-year-old company based in Intel’s hometown of Santa Clara, for undisclosed terms.

In an interview, Intel executives explained that eASIC’s tools for making “structured ASICs” allow Intel customers to take the next step beyond the FPGA chips that Intel sells today. An FPGA is a relatively costly way to produce a custom chip quickly. Over time, there is a need to move to ASIC chips to bring costs down.

The eASIC tools are a kind of bridge between FPGAs and ASICs: They let a company take its Intel FPGA and make it equivalent to an ASIC with “just a couple of mask layers,” says Dan McNamara, head of Intel’s programmable chips division, thus avoiding the heavy expense of designing an ASIC from scratch.

Gearing up for FANG

Canaccord Genuity’s Michael Graham today made some tweaks to his outlook for Amazon (AMZN), Alphabet (GOOGL), Netflix (NFLX) and Facebook (FB) ahead of their earnings reports, the first of which is Netflix’s report on July 16th, this coming Monday, after the market close.

Graham, who rates Amazon, Facebook and Netfli a Buy, but Alphabet a Hold, observes that the “FANG” stocks generally speaking are trading at a 1.2 times premium P/E relative to the S&P 500’s P/E. That is not high, in the context of the past two decades of trading data, but it is “high relative to the last eight years,” he writes.

Despite that, Graham is raising his price targets on Amazon and Netflix. He hikes Amazon’s price target to $2,000 from $1,800, and hikes Netflix to $500 from $350.

Graham thinks his expectation for 38% revenue growth at Amazon in the June quarter might be too low. Beyond the quarter, the company’s "rapidly growing scale of investment is strengthening long-term competitive barriers,” he writes.

"We continue to see Amazon as having the most robust and durable growth outlook in the group."

For Netflix, Graham takes his numbers for subscribers up for all markets. He is now modeling 136.9 million total streaming subscribers by year’s end, versus his prior forecast for 136.75 million. For 2019, he sees 163.17 million, up from a prior 157 million.

He acknowledges that valuation for Netflix is “quite-stretched,” but he thinks “subscriber momentum” will “drive the stock.” His $500 price target is using a multiple of 45 times his 2024 EPS estimate for $21.70, which is a change from having previously used his 2022 estimate.

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